The central bank of the Czech Republic on Thursday kept its policy interest rate unchanged after slashing it to a record low in June as the economy slipped into a recession amid the deepening debt crisis in the euro area and the government's budget tightening campaign.
The Czech National Bank retained its two-week repurchase rate at 0.5 percent after reducing it by 25 basis point in the previous rate-setting session. The decision was in line with economists' expectations. The bank also retained the lombard rate at 1.5 percent and the discount rate at 0.25 percent.
The Central bank had held the benchmark interest rate steady since May 2010, when it cut the rate by 25 basis points.
Czech inflation accelerated to 3.5 percent in June from 3.2 percent in May on higher food costs. The economy contracted 0.8 percent quarter-on-quarter in the first three months of the year, faster than the 0.1 percent decline recorded in the fourth quarter.
by RTT Staff Writer
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